For many legacy businesses, historical technology investment limits the ability to innovate. In conversations with CIOs, they often refer to the mess with the following endearing terms: fragile, band aid and duct tape. The question is – given the pace of coming waves of digital disruption – can IT clean up the mess fast enough for the business to innovate in time?
How big a problem are silos to creating a foundation for business execution?
In the weekly #CIOchat session, many CIOs said it is a fundamental issue, and without clarity, they’ll have nothing! To be clear, silos are natural, but they need a foundation to support them. If you have integration/API interoperability between silos, then you can solve the coordination problem, but if not, you enable business isolation.
CIOs insist there are silos…and there are silos. The latter includes bad processes, poorly integrated systems and data and conflicting cultures. Today, silos represent barrier conditions to customer delight, supplier enablement and employee engagement. One CIO interestingly said, at this point, that sometimes they work to create some tribalism to help teams build identity before going onto explore things outside their boundaries. The bad boundaries, however, really hurt organization effectiveness. For these reasons, CIOs and their CXOs must identify and prioritize silo produced pain points, barrier conditions and eradicate them accordingly. CIOs, nevertheless, stress that you can’t fix all pains at once. For this reason, it is important to prioritize pains according to business impact.
CIOs suggest that un-tackled silos become a business problem. For this reason, IT organizations need to help businesses bridge gaps, and take advantage of unique attribute differences for the business as a whole. One CIO said that organizational silos, process silos, technology silos and a host of others can each create tangible business problems. However, some are huge, some are in the middle and some are small.
What does the mess cost organizations?
CIOs believe there are many business costs associated with the inability to fix the mess. In fact, their list was much longer than I expected.
- Low morale, exhaustion and lack of confidence.
- Focus upon the wrong initiatives
- Decreased IT inertia
- Reduced speed, flexibility and ability to execute. This includes decreased execution ability and response time.
- Suboptimal IT velocity (wasted time, late delivery), quality (errors, rework) and talent contribution (negative turnover, low engagement). It can double or triple the work involved.
- Wasted money. There’s a lot of waste. In fact, IT is a heavy enough burden, it can cost an organization most of its innovation time.
- Impeded ability to achieve customer delight innovation that leads to sustainable growth, market leadership
- The business not choosing IT. One CIO put it this way, “if I need a service, I’m not going to go with a business that’s more chaotic than I am”.
- Lack of coordination. Disney World, for example, is a bunch of silos, but people travel between lands because they make sense together and separately.
This means organizations need to find the resources to create a connected business. Silos without permeable membranes or bridges become resilient to the forces of change and disruption. For this reason, IT leaders need to find the people who can act like structural bridges and then build a connected business.
In today’s world, how essential is establishing an operating model that enables integration and standardization of business processes?
CIOs say that it is an absolute required, but IT leaders must, also, enable agility and flexibility. Standardization – the removal of variation – is seen by CIOs as the key to speed and automation, especially for self-service models. It’s, also, the key to quality. Custom work still may be needed, but it should be called out as a one-off and prioritized separately.
One CIO, at this point, insisted that silos are a much-maligned term. They exist for efficiency. The problem occurs when an organization gets stuck with silos that are detrimental to innovation. This is especially the case where alignment of customer needs to company capabilities are needed. Another CIO said beware of business processes that are concrete and not clay. Today’s standard can become tomorrow’s impediment. CIOs need to strive for learnable, flexible processes that can be removed or replaced. At the same time, it is important to eliminate business processes that exist just for process sake.
At the same time, CIOs believe the operating model needs to transition from waterfall to agile. CIOs claim that it is their job to fix this. “We are here to get this done, and then to spend time doing the value-add things because this is where the high value differentiators or business critical stuff lives”. This is particularly the case for companies with customer-centric and employee-centric operating models. These need the agility to deal with the reality of hyper-acceleration and to position a company to win in the market.
Here the goal should be to be as good as your people need you to be. Your processes need to enable, and your policies need to incentivize performance. CIOs stress importantly that tools and technology should be the last thing to figure out here. However, for many, these are the first thing on the agenda. However, business-oriented CIOs put technology after people and process.
Jeanne Ross suggests a 4-part maturity model. Is this the path forward from the mess?
Some CIOs feel a path forward is: business silos > standardized technology > data and process standardization > business modularity. However, they think for many organizations, the maturity path forward will be more varied, with lots of parallel efforts, culture change and sometimes where you may intentionally choose to stay at a different level or place.
One CIO suggested that Jeanne Ross’ model is simply the process of moving to an agile organizational. At this point, some CIOs said the same result may not always be efficient or desirable. Simply put, CIOs don’t believe IT leaders can use the same recipe for every mess. Furthermore, they suggest that people and culture caused things to be legacy. At this point, Paige Francis, CIO at Tulsa University, proposed an alternative framework: business silos > foundation development > integration points > cohesive environment > technology evaluation.
She stressed next that if the starting point is technology than it is like jumping from the frying pan into the fire. She said it’s a CIOs choice to use a bridge or walk the plank. Other CIOs stressed that there are times where custom approaches are still needed and can add significant business value. But they believe organizations need to establish standards, so everyone can speak the same language and truly evaluate risk versus reward. At the same time, standards should be constantly revisited and revised. And finally, CIOs stress that you must be careful not to try and fit everyone into a single model.
In the age of digital disruption, is the operational backbone table stakes. Why do so few have one?
CIOs say that people and culture caused systems to be legacy. In some cases, CIOs say they are the cause of the mess. With this said, the problem today is determining fixes that produce quick wins or value for the customer or easily quantifiable changes for the top or bottom lines.
CIOs, however, suggest that getting buy-in for the invisible stuff is hard. However, foundations make it or break it for IT skyscrapers. A related problem, CIOs believe, is the average life of the CIO. While it has grown in the last few years, according to analysts, longevity limits the ability to fix things when operating at the IT timescale.
Meanwhile, change is hard. One CIO said here, “culture eats change like a bite-sized snack. Hyper-acceleration means change is more frequent and more imperative. True leaders focus upon changeability as a core competency. This requires highly aligned priorities because change requires patience and courage. Further, it requires that priorities not be too focused on this quarter’s results.” Too many businesses are willingly to sacrifice the long-term to make this period’s numbers. Clearly, change avoidance will limit the ability of CIOs to lead. Also, will an organization that regularly ask is the journey’s effort worth it.
It seems clear the mess has many causes. Culture is a big one. Without the political will to fix the mess no CIO can provide the foundation for building a digital business. And with the political will not all company journeys will be the same. Regardless of approach, time is running out for getting started on fixing the mess.